Contrary to its reputation as an independent state, Wyoming receives the sixth highest amount of federal financial aid of any state in the country -- almost 40 percent of state revenue -- according to the Tax Foundation.
Other states that rely heavily on federal aid are Louisiana, South Dakota and Tennessee. Tax economist Liz Malm says many states have higher numbers of people who qualify for federal programs such as Head Start and Medicaid. But Wyoming’s federal funding mostly comes from mineral royalties since over 40 percent of its lands are federally owned.
WILLOW BELDEN: In 2012, the tribes who share the Wind River Indian Reservation, the Eastern Shoshone and the Northern Arapaho Tribes, came to a settlement with the federal government for a mineral royalties mismanagement case dating back to the 1970’s. The federal government has finally released the money from the settlement, and tribal members on Wind River are anxiously awaiting their checks. Wyoming Public Radio’s Irina Zhorov joins us to talk about the settlement and what it means to the Wind River Community.
To start, could you tell us what this settlement is all about.
Long-awaited money from a settlement on the Wind River Indian Reservation in Wyoming is finally on its way.
The federal government is paying the tribes $157 million for underpayment of royalties on oil and gas development and improper management of royalties that were paid. Northern Arapaho spokesman Mark Howell says some people don’t have bank accounts and there were concerns they would not be able to cash their checks.
The Department of Interior’s oil and gas royalty program has been examined repeatedly in the past for weaknesses and high risk of mismanagement and a new Government Accountability Office study suggests more can be done to guarantee a fair return on extracted natural resources. The study says one of the biggest issues is that the DOI does not have set procedures for reviewing the royalty program.
The federal royalty rate for trona was recently reduced from 6-percent to 4%. Industry has been pushing for royalty reductions for over a decade. But Powder River Basin Resource Council’s Jill Morrison says if anything, the royalty should be increased.
“Our position has always been that minerals are a finite resource. Once they’re removed they’re gone and we have that one chance to tax those minerals and get that fair market value because that’s what’s going to help balance our budget, both at the state and national level,” says Morrison.
The federal government will pay back mineral royalties that it withheld from states under the across-the-board budget cuts known as sequestration.
When sequestration went into effect earlier this year, the Department of the Interior started withholding 5 percent of states' share of the royalties, which are paid on resources like coal and oil extracted from federal lands. For Wyoming, that's amounted to more than $40 million.
On Monday, DOI announced that after a legal review, it's giving the money back.
A lawsuit filed by Tripower Resources says the energy company is not responsible for about $885,000 in back taxes from 2008 to 2010. Tripower says it did not own the wells from which these production taxes accumulated during the time period in question. But Campbell, Crook, and Converse Counties have listed the company as tax-delinquent. They’re applying taxes from current production to the owed back-taxes. Converse County treasurer Joel Schell says, according to statute, the current owner is responsible for any unpaid taxes.
Wyoming is scheduled to lose 53 million dollars in federal mineral royalties this summer along with other federal dollars due to the sequester.
Governor Matt Mead says higher than expected gas prices and other earnings will allow the state to overcome that loss of revenue. But during a news conference with reporters, Mead said that he will be worried if these federal cuts continue.